The second Apple v. Samsung damages trial ended in a remarkable result: $533 Million verdict for infringement of Apple’s design patents, but only $5.3 Million for infringement of Apple’s utility patents. The big (and obvious) takeaway: design patents are no longer the weak sister of the IP world. Long considered obscure and of marginal importance, the verdict shows that they can be a powerful and invaluable business tool.
Yet the verdict has other lessons for those involved in IP. The original verdict against Samsung was for $399 Million. Samsung appealed that all the way up to the Supreme Court – and was victorious there – only to return a second time to trial and be hit with a verdict a third higher! Samsung may have had good reason to appeal anyway, but the result highlights the need for caution and strategic thinking – Samsung may well now regret appealing and winning.
The verdict leaves the law of design patent damages murky. In contrast to utility patents, for design patents the Patent Act allows the plaintiff to recover the infringing defendant’s profits gained from sale of any “article of manufacture” on which the design is used. 35 U.S.C. 289. What if the design patent covers only a component of a total item that was sold? The Supreme Court sided with Samsung and held that the profits might only be for a component portion. But it failed to provide any standards as to how to determine what the “article of manufacture” is in any particular case, leaving it to the lower courts to work out. The jury apparently decided that Samsung was on the hook for the entire profits.
Determining the “profits” to be awarded in a design patent case remains unpredictable, especially since in some cases it will be left up to the jury to determine how much of the item’s profits are awardable. This tilts the playing field in any settlement negotiation in favor of design patent owners and away from accused infringers.